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A MATTER OF INTEREST AND MORE
The non-construction members, please bear with me, this case has interest for all.
Carillion and Devonport Dockyard had a falling out and the resultant adjudication led to the TCC. The part of the dispute of particular interest is the power of the adjudicator to award interest. Mr Justice Jackson found that the adjudicator derived a freestanding power from the provisions of the 'Scheme' (adjudication rules which are implied into the contract if certain conditions are not met).
The Court of Appeal, however, found that the power was not freestanding but was dependent upon the agreement between the parties, which may be the powers included in the Scheme but could include further powers either within the contract or 'accepted' during the 'pleadings'. Acceptance may be by not disputing a request in the Referral.
I have always had a problem with the apparent extent of the powers available under the Scheme, which could exceed the powers available under the Supreme Court Act (i.e. in litigation) or the Arbitration Act.
In this respect, I suggest that the Court of Appeal is correct - the Court or Arbitrator will (or at least should) take account of any agreement between the parties as to when and to what extent interest applies.
However, I am not happy that agreement can be implied from an uncontested Referral. The rule in Court (and usually in arbitration) is that an allegation made in a pleading which is not denied (or 'not admitted) is deemed to be admitted. 'Pleadings' are intended to put that party's case - eg a Statement of Claim - it is then for the other party to respond appropriately. Construction adjudication is different. There is no provision in the Scheme for any response (although one must be permitted to comply with natural justice) and the requirement is to refer THE DISPUTE - the claim, the defence, any reply, etc so that the entire matter is before the adjudicator on day one. It is therefore proper that everything included in the Referral is in dispute unless admitted by the other party. It follows that anything (including a request for particular interest) which is not accepted by the other party is deemed to be still in dispute. I admit that this is apparently in conflict with the finding of the Court of Appeal but I hold to my opinion (although in practice I have to accept the precedent).
Note that this is my own opinion, without liability and is not the opinion of the CIArb or any of its Branches or officers but I hope that other members will contribute to the debate.
Peter Horne